Prenups – Tempting Divorce or a Smart Foundation for Marriage?

A common misconception among couples preparing for life together is that putting plans in place, such as prenuptial or cohabitation agreements, somehow tempts fate, or signals an expectation that the relationship will ultimately break down. Discussions about the future and what you would each like to protect, if the relationship ends, may actually strengthen a relationship and build greater trust between couples.

Planning ahead

A lot goes into organising a wedding or civil partnership, and it should be considered as part of the preparations how the formal union of each other’s lives might look. Commonly, prenups and cohabitation agreements are considered where one person has substantially greater assets or income than the other, where one of you has recently inherited from family, or where you have children from a previous relationship you would like to protect financially. Planning ahead can be ideal for couples who simply like to be as organised as possible with their finances.

Are prenups legally binding?

As things presently stand, the family courts hold jurisdiction to deal with financial and property issues on divorce and are not legally bound to follow the terms of any pre-nuptial agreement. However the courts have made it increasingly clear that where a couple enter into a prenup, subject to certain safeguards, the court is likely to regard the existence of that agreement as a very material factor in deciding what the outcome should be if either spouse made financial or property claims against the other within a subsequent divorce.

There are various safeguards both in terms of the execution of the pre-nuptial agreement and in connection with the status of the parties at the time of the divorce. The court needs to be assured that the agreement when originally entered into was reached fairly and makes suitable provision for both parties in the event of a relationship breakdown. The court will also be looking for evidence that, before committing to the agreement:

• both parties had access to separate independent legal advice
• both parties had all the information that they wanted about the other’s circumstances
• no unfair influence was applied on either party to sign the agreement

Finally, the court will also consider any changes in circumstances of the couple following the agreement being entered into. It is therefore important that following any significant life events such as having children or purchasing further assets, the agreement is reviewed and updated if needed.

Do I need a cohabitation agreement?

Similarly, more couples than ever are buying property together either prior to being married or without ever deciding to get married. Often, one person may put in more money than the other into the purchase or deposit or on improvements to the property throughout the ownership.

A clear agreement, known as a cohabitation agreement, documents your intentions regarding your respective contributions towards the property, and your expectations on a future sale of the property. This can prevent difficult and tense conversations in the event the relationship breaks down.

Like prenups, cohabitation agreements are not automatically legally binding, however if the above-mentioned safeguards are followed, it may be likely that the agreement will be upheld.

If you want to explore entering into an agreement with your partner, our Family team are able to assist you and guide you through the steps required to prepare one. Please contact us by calling 01206 574431 or by emailing enquiries@tsplegal.com for further information.